“I’m optimistic that it’s going to happen,” Wale told the Freep reporters on the sidelines of the Automotive News World Congress in Detroit. “Tengzhong is not an established manufacturer and that’s an issue that needs to be addressed with the Chinese regulators.” Uh-oh.

Wale supposedly told the Freep “that Chinese rules prohibit inexperienced companies from entering key industries, such as the auto industry, without approval.” Baloney, and Wale probably disclosed a major sticking point. All joint ventures need to get government approval. However, the Chinese government wants its car industry with more than 100 players to consolidate to a more manageable number. Beijing wants to see four big ones and four smaller ones. What Beijing definitely doesn’t want is more car manufacturers. So instead of saying outright “no,” Beijing is letting the deal get entangled in red tape.

Wale said they met with local government officials last week and found them supportive. Uh-oh. They need to meet the central government. The locals are always supportive of new business. The matter is stuck with the Commerce Ministry in Beijing – No.2 Dong Chang’an Avenue,Beijing China (100731)

Also according to the Freep, Ed Whitacre indicated that the Hummer deal faces a Jan. 31 deadline to close. “As far as we know, it’s proceeding like it should proceed,” the Freep is quoting Whitacre. As far as we know? Uh-oh again.

18 Comments on “GM’s Hummer Deal In Two Words: Uh-Oh...”

However, the Chinese government wants its car industry with more than 100 players to consolidate to a more manageable number. Beijing wants to see four big ones and four smaller ones. What Beijing definitely doesn’t want is more car manufacturers.

Can you say “command economy“? Fewer companies are easier for the gov’t to control and threaten.

Really? The first comment and we are already to “China is a totalitarian government who wants to control everything”. Honestly the idea of 4 big and 4 small is SUPER smart. It is going to happen whether the government wants it that way or not. 100 small auto makers will not last long before the big ones start gobbling up the small ones. Look at the U.S. We went from many car companies in the early part of the century to just 3, and that STILL may be too many. You need to consolidate to be competative because you need the revenue for R&D, expnasions, etc. The government is just being realistic. Now if they wanted just one company and called it China Motors Corp. then maybe you have an arguement but until then…

Yeah, but that happened in the US via normal capitalistic procedures (basically, the ones who sucked failed and the ones who didn’t succeeded). That’s the way it should happen, not by the government picking winners and losers.

Geotpf,
You have a different look at the history of American car companies than i have and if i look at Korea, Japan, France, Germany etc. Countries with a vibrant car industry. Then i can’t say that capitalistic procedures are the normal for car companies.

Hummer will be bought, but not before GM closes it down. SAAB round 2 in my opinion. It’s been good powerpoints to say we’re selling Hummer, but it’s just not reality. This deal has been stuck right where it is for months and the press snippets seem to indicate nobody reads the real world news and everybody at GM is “optimistic” about the deal.
I think an IPO for Hummer based on it’s green credentials is more likely to happen than this sale prior to it becoming just a parts purchase for jack cash. Look for GM to finally signal the end for Hummer for real closer to the mid-term elections.

GM will be 0 for 4 in selling its defunct divisions (Saturn, Pontiac, Saab, Hummer). You can’t just sell bad products to unwilling buyers. This is a replay of GM’s last 30 years in trying to do just the same with its paying customers.

Wishful thinking from a GM employee: What if Uncle Sam placed an order for H3 and H3T trucks and dispatched them pronto as part of the Haiti relief efforts?
Regarding the sale of the other GM brands, IMO, GM did what its detractors said it should do – reduce brands. Now, should they have just closed them all down ala Oldsmobile at high costs? Or should they have attempted to sell the brands (excluding Pontiac)? Most business people would try to sell an asset.

The roads have deep ruts and debris from the earthquakes and aftershocks. H3’s are designed for high ground clearance to the debris, able to twist in the ditches caused by the ruts, and are able to climb rubble piles. Cars would not be able to Traverse the rugged Terrain.